:Q1:Question One: Chose the correct answer
Operations generated forecasts often not to do with
a.Inventory requirements
b.Resource needs
c.Time requirements
d.Sales
b.The underlying casual system will remain same in the future
c.Forecast for group of items is accurate than individual item
d.Short range forecasts are less accurate than long range forecasts
b.Time series
c.Time horizon
d.Associative
b.Time series forecast
c.Associative model
d.All of the above
b.Time series forecast
c.Associative model
d.All of the above
b.Time series forecast
c.Associative model
d.All of the above
The demand for period t-2 and t-1 is 10 and 12 cases respectively. As per naïve method, the demand for next period ‘t’ is
b.11
c.12
d.14
:Question Two: Answer all questions
(Q1)
When the moving average method is used to estimate the seasonal factors with quarterly sales data, what period moving average is required
:Answer and Explanation
We’re given that the moving average method is used to estimate the seasonal factors with quarterly sales data. The formula for the simple moving average (SMA) method is: SMA=A1+A2+……An/n
Here:
• A is the average for the period n.
• n is the number of periods.
As we’re dealing with quarterly sales data, a 4-period moving average method is required: n = 4
(Q2)
Consider the following time series data. Week 1 1 2 3 4 5 6 Value 19 14 16 12 18 15 a)Develop a…
:Answer and Explanation
a) As, MA (3) denotes the forecasted values, calculated by adding values over a certain period of time and then dividing the sum by the total number of periods.
34.88889/3=
11.6296=
Given is a historical time series for job services demand in the prior 6 months. Month Demand 1 26 2 29 3 27 4 25 5 28 6 27 a) The MAE based on the Exponential smoothing
| Month | Demand |
|---|---|
| 1 | 26 |
| 2 | 29 |
| 3 | 27 |
| 4 | 25 |
| 5 | 28 |
| 6 | 27 |
(Ft+1=Ft+α(At−Ft
It is given that α=0.3/
Substituting values in the above formula
(F2=F1+0.3(A1−F1
(F3=F2+0.55(A2−F2)
=26+0.3(29−26=
26=(F3=F2+0.55(A2−F2
(29−26)26+0.3=
26.9=
In a similar manner, all the forecasted values are computed
MAE=∑|error|/n
6.83336=
1.1388=
(Q4)
Week |1 |2 |3 |4 |5 |6 |7 |8 |9 |10 |Demand |21 |23 |29 |38 |24 |30 |36 |20 |26 |28 Determine The forecast for weeks 2 through 10 using exponential smoothing with alpha = 0.5
:Answer and Explanation
The forecasted value exponential smoothing values are calculated using the formula
(Ft+1=Ft+α(At−Ft
It is given that
α=0.55
F1=21.0
Substituting values
(F2=F1+0.55(A1−F1
(21-21)21+0.55=
21=
(F3=F2+0.55(A2−F2
(23-21)21+0.55=
22.1=
In a similar manner, all the forecasted values are computed
(Q5)
The number of boys who attend summer camp has been recorded for the seven years the camp has been offered. Use exponential smoothing with a smoothing constant of 0.8 to forecast attendance for the eig
:Answer and Explanation
Given Information Smoothing constant is 0.8(α)
The forecast value of year A is same as actual value
Then the subsequent values are calculated using,
(Ft+1=Ft+α(At−Ft
(F2=47+0.8(47−47
47=
(F3=47+0.8(68−47
63.8=
(F3=63.8+0.8(65−63.8
64.76=
(F4=64.76+0.8(92−64.76
86.552=
(F5=86.552+0.8(98−86.552
95.71F6=
=95.71+0.8
(121−95.71)
115.942F7=
=115.942+0.8
(146−115.942)
139.988=
|(Now MAE is mean absolute error MAE=1/n∑ni=1|(fi−Ai
0+21+1.2+27.24+11.448+25.29+30.058/7=
116.236/7=
16.605=
Hence the MAE is 16.605
(Q6)
The price of bananas fluctuates on the world market. The prices Stonne for the years 1998 2002 are 1998 shown in the table. 57535 a Find a 3 year moving average prediction for the price in 2003.tonne
:Answer and Explanation
The 3-period moving average is the average of the three previous period of time to get the forecasted value of next period of time
The 3-year moving average for year 2003 is the average of the actual value of the year 2000, 2001 and 2002
Multiple Choice Questions (MCQ) on Forecasting
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